FERC has taken steps to improve regional transmission planning and cost allocation of certain types of transmission with a Notice of Proposed Rulemaking (NOPR). The proposed rule addresses the need for the US’s energy infrastructure to be more resilient and reliable while also achieving cost savings for consumers.
“Transmission facilities provide a broad range of benefits,” FERC Chairman, Rich Glick said. “Planning for those facilities with a longer-term forward-looking approach, in addition to fairly allocating their costs, is essential to ensuring we are developing energy infrastructure in a manner that reduces costs and enhances reliability.”
“[The] proposal is the culmination of months of work by FERC’s dedicated staff and the Commissioners,” Glick added. “While there is a great deal more to do, I believe the Commission is rising to meet a timely and important challenge.”
Highlights of the proposed rule include:
Proposed changes to regional transmission planning
Transmission providers would be:
- Required to conduct regional transmission planning on a sufficiently long-term, forward-looking basis to meet transmission needs driven by changes in the resource mix and demand.
- Required to identify transmission needs through multiple long-term scenarios that incorporate a minimum set of factors, such as federal, state, and local laws and regulations that affect the future resource mix and demand, trends in technology and fuel costs, resource retirements, generator interconnection requests and withdrawals, and extreme weather events.
- Able to consider a proposed list of broader set of benefits of regional transmission facilities to meet these long-term transmission needs for the purposes of selection and cost allocation.
- Required to establish transparent and not unduly discriminatory or preferential criteria which seeks to maximise benefits to consumers over time without over-building transmission facilities to select transmission facilities in the regional plan for purposes of cost allocation that address these long-term transmission needs.
Proposed changes to regional transmission cost allocation
Each transmission provider would be required to:
- Seek the agreement of relevant state entities within the transmission planning region regarding the cost allocation for transmission facilities selected as part of long-term regional transmission planning.
- Establish a cost allocation method for transmission facilities selected as part of long-term regional transmission planning that is an ex ante cost allocation method, State Agreement process by which one or more relevant state entities may voluntarily agree to a cost allocation method, or a combination thereof.
- Establish a cost allocation method for transmission facilities selected as part of long-term regional transmission planning that complies with the existing six Order No. 1000 regional cost allocation principles.
Proposed amendments to Order No. 1000: right of first refusal
The NOPR proposes to amend Order No. 1000 to permit the exercise of a federal rights of first refusal for transmission facilities selected in a regional transmission plan for purposes of cost allocation, conditioned on the incumbent transmission provider establishing joint ownership of those facilities.
Read the article online at: https://www.worldpipelines.com/regulations-and-standards/03052022/ferc-issues-transmission-nopr/
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